welcome to bloomberg markets. ♪ taylor: u.s. stocks are rebounding today. more on that in a few moments. i want to send it over to emma chandra. welcome to bloomberg markets. ata: we are looking at 97.5. coming in this is the final print for november. tell us more about how consumers have been ingesting the results. existing home sales rising to 5.22 million. the estimates have been 5.2 million. the housing sector something we have been taking a close look at. mortgage rates might be

affecting the sector. let's move now and look at u.s. equities. we are looking at above it of a best at a little bit of a --at a little bit of a mini rally. -- nasdaq up over one poin 1.2%. trading volume is lower on the s&p 500 as we head into the holiday. down about 15% below the 20-day moving average. investor sentiment is still fragile given all the volatility we have seen in the markets since october. which way could we had? look at this chart. that we areing seeing s&p 500 valuations falling. they have fallen to a five-year low. there are two ways to read this chart. you know we are set for a bit of

a bounce or the forecast out of earning season could be a little too optimistic. here is something we have not seen in a while. faang way in the green. we have facebook up 2%, amazon up almost 3%, netflix and alphabet rising as well. all the stocks are down double digits for the quarter. amazon could be looking at a bit more of a bounce this weekend for the holiday shopping season getting underway. they would get a bounce anyway but we are looking at very cold weather for the northeast and that may need more people stay at home and shop online rather than go to the stores. i want to look at oil. we should be able to see oil falling a little bit. we are getting a bounce today. yesterday it fell to a one-year low. it is up 2% on the day. we heard from president trump thinking the saudi's for low oil prices and asking for them to

make it go lower. taylor: -- guy: we will get data on the oil story soon. doed data. we are starting at session highs right now. stocks have been boosted over the last few minutes. thine likely to see markets over the next few days. stocks definitely bouncing back. isry single sector bar one trading in positive territory in europe. the stoxx 600 is up right now. we continue to see weakness in the dollar story continuing to emerge. there was a report earlier on suggesting the fed may look to get out of its hiking cycle as soon as the spring of next year. we really have seen positive tp's.ment towards b

not as much movement as you would have anticipated. the market in the green. yields are coming down. prices are rising. yields down by quite a decent chunk today. this despite the fact the european commission started proceedings against italy as a result of its budget. we are talking way down the line but italy maybe fined for its budget. as i say, reasonably light volume for europe. guy: -- taylor: here is some insight and analysis from top guests today. >> in my mind pricing is getting more attractive and at some point we will be back in the market and i expect a lot of investors are thinking like we are. >> i think in terms of what they are looking for, strong balance

sheets and the ability to pay dividends. fundamental investments can't ignore the facts and the facts are supportive. >> buy the dip has gone away. there is an inclination to start selling rallies instead, a complete reversal of a we have seen for the last several years. us, believee like in quality growth companies and long-term prospects, it is the time to be brave rather than afraid. taylor: romaine bostick joins us now. dip seems to be in play. that seems to be playing in the markets today. computeralking about hardware and software leading the day. what is its all you that some of the worst yesterday are some of the best today? ramaine: the market is becoming

more dispersed. this story was kind of all interconnected. everyone was rising. it did not matter who reported good earnings. the whole industry would rise with it. some of the software services companies are reporting earnings that are good for them and their shares are rising. that is not necessarily pull up the rest of the market. people are having to cherry pick who are the winners and losers. that is why you see this in prices over the last few weeks. it kind of works our advantage. if it holds in the next week, we will have to wait and see. guy: i want to look at the andt that relates to pe's the conversation we heard with some of our guests. fundamentals looks fairly rosy at the moment. valuations you as well -- do as well. it is well below the five-your

average. the biggest function built into that is this idea that we are going to see earnings coming through. that is the question investors are trying to deal with. will earnings be delivered upon at the rate we anticipate them? ramaine: when you look at the price action, the answer is sort of no. we are down below 19 on s&p, below 22 on the nasdaq which are considered levels that would bring buyers back into the market. we sell below those letters a week and a half ago -- levels a week and a half ago. valuations are cheaper than what they were a few weeks ago or a few months ago, for the question that the going forward narrative has changed for the valuations are now outlandish and you are looking at 19 and 22 on the various major indexes. people are saying that is still to richly valued.

people are going to buy wholesale, buy a basket of stocks. they will cherry pick a lot more. taylor: we talk about cherry picking and we have to talk about earnings. how has that played through today? what lookedy gave like a pessimistic forecast. sales will be flat. on a global basis for construction machinery it would be up around 15%. they said they are finding way to pass on after cost from the higher steel tariffs on the consumers. it is not so much bad for deere. they are benefiting from the fact we are on the upswing of that cycle where farmers are in a position where they have to upgrade machines if they want to keep farming, whether it is soybeans or whatever else. guy: i want to wrap it up with a quick thought on foxconn. foxconn is not just working with apple.

it works with pretty much the entire global technology sector. if foxconn is coming out and talking internally about the idea that they need is a cost of the business, isn't that a real shot across the bow to the markets? technology has been the driver. foxconn isn --if having an issue, we should pay attention. ramaine: that's a good point. for most of those cost cuts, $3 billion, only a third of that is coming from apple tied to the iphone sales. the rest of that is coming from presumably another universe of smart phones and other devices. they did not specify which ones. whatever potential slowdown in they justales, seem to be softness overall across the consumer technology sector. i think we will see that show up

in the results in the next quarter. taylor: romaine bostick, thank you. let's get a check on the bloomberg first word news with katie lang. that -- kaylie: president trump is thinking saudi arabia for keeping oil prices debt. he said lower prices are like a big tax cut for america and the world. he urged them to force prices lower. that comes a day after he said he would stand by the saudi's whether the crown prince or the death of jamal khashoggi. production surged to a record. they boosted output after stronger than usual demand. it is not clear how long the saudi's will keep this up. opec meets next month. the saudi syndicated they support cutting production. a dozen gop senators urging president trump to send congress u.s.-canada-mexico

u.s.-canada-mexico trade agreement. they wanted to pass democrats they control the house next year. some house democrats want the agreement to be revised. the trade war with china appears to be cooling momentum and american factories. nonmilitary capital growth excluding aircraft was little changed. global news 20 hours a day on-air and a tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. guy: thank you very much. coming up, trump versus the fed. the president calls for lower rates as the central bank gears up for another hike. this is bloomberg. ♪

guy: live from london, im guy johnson. taylor: this is bloomberg markets. president trump is ramping up pressure on the federal reserve. president trump: i would like to see the fed with a lower interest rate. i think we have much more of a fed problem than a problem with anyone else. taylor: we are joined by ken monaghan. great to have you here. i want to take what president trump said about putting pressure on the federal reserve. they will raise rates. ideally, high yields should outperform because the economy is strong, junk companies can rake in corporate profits. have you view where we are in terms of credit spreads? ken: i think you are right. a fed hike in december is already baked in.

there is an expectation be will see several hikes in 2019. high-yield spreads backed up significantly, flight 100 basis points on the back of his equity market volatility. we are nowhere near -- we were at the trough of october 1. we are now about 100 basis points wider taylor: have a backup enough to get you interested? ken: high-yield spreads are quite attractive at the moment. if we are looking forward to 2019, and who knows what the next month will bring and where people in the year in terms of the year- where we ebd in terms of spreads. the fed is still raising rates and what kind of impact that will have on investment-grade securities. would a, how big a rock ge downgrade be? ken: 70 significant -- that

would be significant. it's still rated at a fairly high level in the bbb space. a fair we would expect number of downgrades into the high-yield market on the back of a recession. we w call them fallen angels. i would expect there is a significant risk of that happening out there on the back of the recession, whenever that comes. we don't expect that for 2019. there are a lot of investment-great companies that are mindful of doing things necessary to maintain the rating. whether it is cutting dividends or raising equity, they will be protective, as will ge. about what think happens over the next few quarters in years, the market is trying to figure out if we are seeing a slowdown. i look at default rates. i am stunned default rates are

really are, very low. when you expect the default rates to rise? ken: when you look at the forecasts that it can often the rating agencies or the strategists, there is a next vacation we might start to see default rates rise modestly towards the back end of next year. compared to where they have been historically, i think we will have fairly low default rates for 2019. taylor: i want to talk about some of the impact on the low oil prices in the energy sector. spreads are arguably loan out. are you interested in terms of the high-yield credit? ken: we have to break it down to subcomponents. you think about refiners, pipelines, emp companies, service companies. some of those companies like the service companies have been hit hard by what's happened with the decline in energy prices.

the expectation is the drilling activity will not take up anytime soon. while mr. trump may argue for lower oil prices, you need to remember what a significant impact that had in 2015 and 2016 on industrial america. there were a number of those industrial companies producing equipment that is used in the energy exploration industry. with energy prices dropping lower from these levels, you will see the same kind of impact again. taylor: you talk about how ccc's are the sweet spot in the individual credits. are they still your sweet spot? ken: i would not call them the sweet spot so much anymore. they were the place he needed to be to perform this year. they areok at bb's, still under water in terms of return year-to-date. ccc's are above water but the gap has narrowed dramatically. gets about 200 basis points in terms of your today performance. wide ass wdie as -- as

500 basis points. guy: final quick question. if we were to see the markets turn, to start to see some sort of significant turbulence, how exit problem is the type that exists in the markets? will pick it up for you, but that is not the case in credit. resorte a buyer of last for has that ceased to exist since the finds a crisis? ken: historically the buyer of last resort for high-yield bonds is an equity investor. they look at returns and say i can buy up in the capital structure and get a return that inequity-like return. i remember being at the jpmorgan annual high-heeled conference in the spring of 2015.

the energy crisis was upon us at that point. it was the first time in years i had seen distressed equity investors show up. at these levels the high-yield marketplace begins to look interesting again. if you're looking at the yield on the bloomberg barclays u.s. high-yield index, is about 725. versus and equity return, that is getting to -- versus an equity return, that is getting interesting. taylor: ken monaghan, thank you. guy: crude is rebounding ahead of key data. we will bring you the status on the drop in to the bloomberg -- the data when it drops into the bloomberg. this is bloomberg. ♪

guy: live from london, i am guy johnson. taylor: this is "bloomberg markets." .e are joined by mark paris always great to have you here. you were listening to the last segment about corporate high-yield and some of the selloffs. how does that fold into your world in terms of credit spread widening? mark: happy thanksgiving and thank you for having me here. we have been a little better. muni high-yield spreads tightened in the first half of the year. they widened in the fourth quarter but nowhere near the 100 basis points ken was talking about. it's about half that for high-yield. supply has played a big picture into what is coming on fundamentals -- coming on. fundamentals are good.

we were sort of a little bit tighter at the beginning of the year. now we have given up a little of that to go back. 100 to the quarter. we are about flat. taylor: let's get into some of the tobacco bonds. they have been interesting recently because of the fed ban on menthol. are you a tobacco buyer? mark: there are some good entry points in tobacco. the high-yield sector is heavy in the tobacco market based on the settlement agreement that all the states did. menthol.e is not as it is the sensation rates. it is been a big ride down. you have to be very careful in the sector. the yields will be very enticing but it's about price movements going forward. december is usually a good month for muni's.

if they sector you need to be careful about. taylor: let's push it forward into december. let's talk about the supply and demand dynamics we have seen. this year we struggled with supply. we did not get an infrastructure bill. for to we see supply going from here? mark: you have gridlock in washington right now. i don't think there will be any new bills on the table. infrastructure is a long way away. we have 25% less apply this year than last year. even with a little bump next year, we are looking at about 20% off where we were. 2016 and 2017, very big supply years. the environment will continue. that means it is silly good environment to invest in muni's. demand has not been great this year. we think that will pick up next year, but supply will remain low. taylor: we get those december,

january coupon payments that was firm up on the demand side. that was mark parris at invesco. guy: shop till you drop. the shopping season is almost upon us. what does the outlook look like for the retail sector? we will find out next. this is bloomberg. ♪ [ phone rings ] what?!

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see the grinch in theaters by saying "get grinch tickets" into your xfinity x1 voice remote. a guy just dropped this off. he-he-he-he. guy: live from london, i am guy johnson. taylor: i am taylor riggs. this is "bloomberg markets." guy: we are about to get data on the oil market.

change.ing at $54 in you expect a distal it draw -- bilduild. and a gasoline the build is way bigger than anticipated at 4.8 million barrels. we are seeing not much reaction in the crude market. let's look at where the distillates are. the draw is quite small as well, which is interesting. we are anticipating cold-weather coming through. gasoline, we have seen a little bit of a draw as well but not as much as the market was anticipating. we are starting to see the premarket come down a little bit but not by much. it will be interesting to see how it works its way through. there are other factors in the market, like the tweet from the

president. a bigger build in u.s. crude inventories. a smaller than anticipated dr aw and gasoline and distal lates. distillates are heating oil and it is cold outside. i want to check on the bloomberg first word news. trump thankingnt saudi arabia for keeping oil prices low. he wants the king them to make them even lower. lower prices are like a big tax cut for america and the rest of the world. this comes a day after he said he would not let the murder of jamal khashoggi jeopardize relations within the u.s. and saudi arabia. the u.s. is ramping up the trade dispute with china data for

leaders are scheduled to meet. the trump administration is accusing china of a state-backed campaign of state and technology theft. filings for you as an appointed benefits rose to a four-month high last week. that reflects holiday-related volatility and what is otherwise a strong labor markets. u.k., theresa may is in a precarious situation as she has to brussels for brexit talks. she is trapped within her colleagues and what to rewrite the deal and european leaders who say they will walk away if she does. european with commission president jean-claude juncker today. global news 20 hours a day on-air and a tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. taylor: put have had a slew of retail earnings this week.

how does the sector look going in a black friday? the entire holiday season? boylee met boyle -- matt joining us now. it feels like a tale of two markets. the best performers are foot locker and haynes brent. this week target really getting crushed in terms of stock market reaction. what is going on? foot locker has a brand-new lebron james figuring that they apparently sold out of. target was the focus of a lot of investors. they had a very good year and a good set of results on the top line, but their margins got squeezed by all the additional web sales they are doing. selling on the web is expensive. they also built up a lot of inventory, particularly in toys because target wants to win in toys this year. to build up an inventory also at

the bottom line. guy: does black friday simply reinforce the strength, the big web retailers have? it has in the margins that if they crossed by the brick-and-mortars because they are having to spend more and more on online. does this process continually cycle after cycle reinforce the strength of companies like amazon? phil: it does, especially if we get a really cool thanksgiving. that could keep people away from the stores. they will probably just shop online. there are still a lot of strong retailers out there. walmart, target, best buy had a very good report yesterday. they were one of the few stocks that rose yesterday because best agnostic.oaches brand get whatever you want. the apple stuff sits next to the google stuff in their stores. people like to walk around,

especially for things like smartphones. and retailer like best buy can still really deliver. taylor: when we talk about amazon and its shipping costs, you talk about the pressure further down on margin. a lot of these retailers are offering free shipping because they need to compete with amazon. that is hurting some of their margins and income statements. what every learning from this earnings season about wage pressure and the free shipping? phil: free shipping -- matt: free shipping is another thing pressuring their margins. they have raised wages this year. general,ation costs in not just about web orders, but a trucker shortage has hit retailers very hard. that has been going on for multiple quarters. throw in the free shipping deals and it will really wreak havoc on margins in the fourth quarter. guy: i find this really interesting. what we also have got is a

consumer -- look at the consumer confidence data. it is still really poignant. it's amazing clear talking about the negatives surrounding the retail space when the consumer probably has more money in their pockets to go out and spend. matt: that speaks to the dichotomy where the consumer has been very strong all year. the target ceo said it was the strongest consumer environment he had been in his entire 37 years. we asked him, frank cornell of target -- are you -- brian said thef target -- he consumer is as strong as it's ever been. we think that will be a reason why this might be one of the strongest black friday and holiday seasons we have seen in some time. taylor: they strong black friday -- the holiday season is expanding. blacke see deals on friday? matt: jcpenney is desperate for

a turnaround. their stock is been around one dollar for a while. they are doing black friday warm-up sales and black friday extended sales. it's almost like a day anymore. it is like a state of mind. taylor: where are you lining up at midnight? but ihopefully sleeping, will be talking to regional managers for walmart and target. they are the ones you want to talk to about what is going on. matt, in terms of how the u.s. shopping season translates and what we learn around the world, we just had singles' day as well, how comparable are black friday and singles' day? on the u.s. retailers you almost establish this kind of ideal now learning from china. matt: singles' day, amazon prime day, you are seeing these invented holidays.

you can't scoff at something like singles' day for alibaba and the scale in volume of sales they experienced. you look at black friday, it has a much longer history but what fascinates me is the fever around black friday. you remember when we were in london and black friday migrated to the u.k. and even across parts of europe for no reason whatsoever. retailers were afraid of not being caught up in missing some of those possible sales. e,ylor: thank you matt boyl who will not be lining up at midnight to go shopping. this is bloomberg. ♪

guy: i am guy johnson. taylor: i am taylor riggs.

this is "bloomberg markets." guy: we don't get to talk golf very often. black friday is not just about shopping and college football. we will see a ground breaking event in the world of golf. the two from your golfers the last two decades, tiger woods and phil mickelson squaring off in las vegas in the first of its kind. a pay for play -- pay per view event. they had a pretty terrible ryder cup but you will want to watch these two playing golf and watch them play golf against each other. vonnie quinn spoke to both of them ahead of the showdown. tiger: we hope we can get a tremendous amount of viewers in this event and see it for what it is, which is something very

unique. we have never done anything like this. i think that will be a success going forward. phil: for me, it is winning. me tos an opportunity for take out these decades of frustration i've had at this guy beating me for so long. and focus it on the opportunity to take $9 million from his hands. that would be a success for me. what we are also doing is giving the viewer an opportunity to see something they don't ever get to see in a normal telecast. we will have drawn coverage -- to hear ourge, mics conversations with our caddies, no cutaways for commercials. you will hear all the talk, all the banter throughout the entire hole. that will give an insight to the viewer they have been wanting to know what is said, what type of strategies are your head, what

type of banter goes on between players. this is an opportunity with only two guys to have it inside for the viewers at home. vonnie: you have gone head-to-head 18 times. 10 of thoseer won times. is the pressure different given the type of match it is? phil: i think it is -- tiger: i think it is different. we are going at each other head-to-head. whether it is a regular tournament or a world championship or this, we don't like losing to one another. we will have an exciting time on friday, but at the end of the day on not losing to phil an unsure he feels the same way. phil: the normal event has a much different feel. you are playing against 150 guys. this is a direct head-to-head thetition -- competition

brings up the intensity of a huge boxing or tennis match. one against the other. there is no breaking up of old man parr. we are trying to beat each other and play for a sum that makes us uncomfortable. this is a pressured environment and intensity i think a lot of people will be interested in how we react and respond and perform. vonnie: how do you prevent a runaway victory given this is match play? it looks like it's going to be a runaway victory, do you still play 18? tiger: he needs to play better. he needs to play better. -- sorry. [laughter] vonnie: it is hard to trash talk in golf. have either the actually said anything hurtful yet? tiger: it is really not. phil: the thing is tiger does it

under his breath, every passive aggressive. most people miss it. you he has a live mic on, will hear how he likes to get the needle. it goes unnoticed and does not draw too much attention, but in this format it will be drawn out. i think it's a good thing because i think it is funny. i don't like necessarily being the target of the time but i also don't mind it. wille: tiger, if you win, phil want a rematch? tiger: that is too far off in the future. you have to win first and that's not going to happen. phil: i think you are missing something here. i am ready. it's on. i don't see it going the way it has gone for -- tiger: 20 plus years.

phil: are head-to-head record is pretty close. vonnie: are you worried about the hot mic issue on the golf course? are you worried something might come out that he might be embarrassed about afterwards? phil: i am not. tiger: the whole idea is for us to enjoy it and give the viewers a different look at it and be a part of what it's like out there in a setting like that. there are moments when i will have a conversation with caddies that are a little heated and more in depth. it is different and unique. you get to a point between -- in our match but just a talker things, the strategy before or after you hit a shot, setting myself up for this angle, this wind.

what time is that wind is supposed to start changing? 3:00, 4:00? is a shifting to the east? east?it shifting to the i think the viewer will find a very fascinating. guy: tiger woods and phil mickelson talking to vonnie quinn. tiger has changed a little bit. the hot mic, it will be interesting to hear it yes to say. does it compare with say one of the great boxing matches? that's another question people are asking themselves right now. taylor: after that interview i think you have to watch. guy: the tiger chat. taylor: let's look at some of the biggest business stories in the news right now. deere. they reported fiscal fourth-quarter earnings that missed estimates and the earnings forecast was lukewarm. the trump administration's trade

fight with china is expected to weigh on america's farmers. t-mobile's arguments for buying sprint might not be winning over officials. they are telling regulators it will help them can be more vigorously against at&t and verizon. back in september they focus on how taking of restraint would give it an average -- an edge in building a five g network. airbus getting closer to a cementing its executive lineup after a major reshuffle. they named a new chief financial aticer, who has been cfo nvidia since 2011. wilhelm.ed harold that is your bloomberg business flash. guy: all kinds of stories. when he did talk about the possibility of starting to look

at the replacing the a320 narrowbody. we will talk about happening with crude. oil moving a little bit of the u.s. inventory data. really not very much. the data is interesting. plus, was happening in the crude market is fascinating. that is next. this is bloomberg. ♪

guy: i am guy johnson. taylor: i am taylor riggs. this is "bloomberg markets." guy: we are watching oil and gas. it will be a cold weekend in the united states for thanksgiving. demming joins us now. it looks like we have some cold weather coming in. does that mean the relationship between gas and oil and the distillates -- how does it all

change? the dynamicsseeing in the marketplace still being disrupted by the disruption in natural gas. you have some dynamics in the marketplace. lower inventories, higher expectations demand -- expected demand, and higher inventories in oil. that is the dynamic you are seeing. you are seeing a big reversal in the long crude short trade changed around. some are going into longneck short crude. guy: how long does that last for? is it something you think has legs? dan: i think it has a little bit more legs in a than what the market is anticipating. we are seeing 15-year low and a demand continues to be ramped and a ded

continues to be ramped up. the weather forecast is changing. it will appear demand will continue. we are going into an extraction period. the build or the drop. that is a triple digit draw, the earliest on record for nat gas if it happens. lower supply, higher demand. there is a possibility for the trade to continue moving forward. guy: if the trade is getting flipped on its head, gas versus oil, parking lot position for the options market? dan: i think that is an well highlighted. certain entities have another position. we have seen this happen in other markets. we saw it in the volatility space in february. you get too many people on one side of the market. you see the short stated position -- short theta position. you have too much exposure.

we are seeing the ramifications of that. short covering is certainly the theme in the market place right now. that is why you are seeing these dynamics. guy: thank you indeed for joining us. pandemic -- dan demming. the stock of the hour is airbus. apparently they are thinking about starting a process of replacing the a320. that is a major development. brought us this earlier. the a320 is the workforce, along with the 737 of most airlines. replacing it is a really big deal. how far into this could airbus be? startin: they need to getting things sorted out early on. they will likely be putting on

absolutely new engine technology that will drastically reduce fuel performance -- fuel efficiency. that could take up to a decade. this is the early stages. we found this out probably to conversations and partly seeing ads, looking for engineers to help spearhead the project. taylor: i want to talk about the management shakeup going on and how that is affecting the company. you read about the new ceo. become survey chipmaker. what is -- he comes from a chipmaker. what is he expected to do? ben: they appointed a new cfo and new coo. these were they developments for airbus, a massive management shakeup. that has been around

investigations into allegations of bribery and corruption. this is also just a generational shift. the old coo was due to retire. the cfo is a strategic, important position. these are multibillion dollar programs that require intense management in terms of loans. the he will have a critical role going forward with these new programs. guy: considering how boeing is fine as well, play it very much. interesting story about airbus today. up next, we are counting down to the european close. this is bloomberg. ♪

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guy: here are the top stories. stocks stabilizing and the dollar goes forward on the force of the fed. brussels tells italy it may break some e.u. spending rules. pass thisarket problem? -- theresa may tries to fine-tune the brexit deal. angela merkel suggesting it is not a done deal. let's talk about where the markets are in europe. this is the picture we find ourselves with.